2023 - 2026 ESC Memorandum of Understanding: Article 10: Medical Benefits for Future Retirees

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What’s on this Page

• 10.1 Retiree Medical Coverage
• 10.2 County Contribution Toward Retiree Medical Plans – Employees Hired Before January 1, 2009
• 10.3 County Contribution Toward Retiree Medical Plans – Employees Hired On or After January 1, 2009
• 10.4 Surviving Dependent – County Contribution for Employees Hired Before January 1, 2009
• 10.5 Surviving Dependent – County Contribution for Employees Hired On or After January 1, 2009
• 10.6 Additional HRA - Eligibility
  • 10.6.1 Additional HRA - Biweekly Contribution
  • 10.6.2 Additional HRA - Access to Account Balance, Survivors, and Forfeiture
  • 10.6.3 county HRA Contribution - Full Obligation
  • 10.6.4 Additional HRA - Determination of Intent
  • 10.6.5 Maintenance of HRA Accounts
  • 10.6.6 Waiver

Read Next: Article 11: Union Rights and Security

An eligible retiree and eligible dependent(s) (as defined below), may be enrolled in a County offered medical plan as described in Section 10.2 but is allowed only to enroll either as a subscriber in a County offered medical plan or, as the dependent spouse/domestic partner of another eligible County employee / retiree, but not both.  If an employee / retiree is also eligible to cover their dependent child / children, each child will be allowed to enroll as a dependent on only one employee or retirees’ plan (i.e., a retiree and their dependents cannot be covered by more than one County offered plan).

An eligible dependent is (as defined in each plan document/summary plan description):

• Either the retiree’s spouse or domestic partner; or
• A child, based on your plan’s age limits, or a disabled dependent child regardless of age.

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1. Eligibility: In order to be eligible for this benefit, the retiree must have:
   1. Completed at least 10 years of consecutive regular full-time paid County of Sonoma service employment.  The equivalent worked or purchased regular part-time County service time can be counted toward the 10 years.  However, any miscellaneous purchased service time such as Extra Help, contract, and leave of absence service time purchased after January 27, 2010 does not count toward this eligibility requirement, and
   2. Have been a contributing member of the Sonoma County Employees’ Retirement Association (SCERA) for the same time period, and
   3. Retire directly (simultaneously) from Sonoma County service. If retiree previously deferred membership in SCERA, the retiree forfeits eligibility for all benefits described in this Section.
   4. Laid-Off & Restored Employees: Employees who were employed by the County prior to January 1, 2009, but who were laid off thereafter shall be eligible for the benefits described in this Article 10.2 provided that they are subsequently restored to County employment, pursuant to Civil Service Rule 11.4, rejoin the County retirement system, and are otherwise eligible for retiree medical benefits under this section.  The break in service caused by the layoff shall be bridged upon restoration such that, although no service time is earned during the break, consecutive service is restored for eligibility for this benefit.  To the extent allowed by law they shall not be eligible for the benefits described in Article 10.3 (County Contribution toward Retiree Medical Plans - Employees Hired On or After January 1, 2009 - Effective January 1, 2009).
2. County Contribution: The County shall contribute toward the cost of County offered medical plans for any eligible retiree whether or not the retiree covers eligible dependent(s), an amount that shall not exceed, nor be less than, $500.00 a month. The retiree is responsible for all costs (including premiums) that exceed the total County contribution.
3. Additional Dependents: Retirees eligible under this section, may enroll eligible dependent(s) in the County offered medical plan elected by the retiree but the retiree is responsible for all premium costs in excess of the County’s contribution.
4. Retirees Who Reside Out of Managed Care Service Area: Effective for retirees retired on or after July 1, 2023, who meet eligibility requirements in this Section and the Surviving Dependents (as defined in Section 10.4) of retirees who meet eligibility requirements in this Section, who reside outside of all County-offered managed care medical plans’ service areas (also includes care service areas for retiree-only managed care plans), are eligible to receive a contribution of $500 per month into the Retiree Health Reimbursement Account. Retirees or Surviving Dependents (as defined in Section 10.4) must activate this within 30 days of moving outside of the service areas of all County-offered managed care medical plans. All retirees and eligible dependents who receive a County Contribution to a Retiree HRA are responsible for Medicare Part B premiums.

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For employees hired on or after January 1, 2009, the County shall contribute to a Defined Contribution retiree medical benefit plan for each eligible employee in the form of a deposit into Health Reimbursement Arrangement (HRA) account, as described below.  Any eligible retiree and eligible dependent(s), as defined below, may enroll in a County offered medical plan, but the retiree is responsible for all costs (including County offered retiree medical plan and Medicare Part B premiums).

1. Eligibility
   1. An employee must have been a contributing member (or a contribution was made on their behalf) of the Sonoma County Employees’ Retirement Association (SCERA) for the eligibility period described below.
   2. Regular full-time employees and part-time employees in an allocated position of .5 full-time equivalent or greater, hired on or after January 1, 2009 are eligible to receive a County HRA contribution, if they have completed two (2) full years of consecutive Sonoma County regular service (excluding overtime) in pay status.
   3. If an employee separates employment before meeting the eligibility requirement, the employee shall receive no benefit.
   4. Laid-Off & Restored Employees: Employees who were employed by the County prior to January 1, 2009, but who were laid off thereafter shall be eligible for the benefits described in this Article 10.3 provided that they are subsequently restored to County employment, pursuant to Civil Service Rule 11.4, rejoin the County retirement system, and are otherwise eligible for retiree medical benefits under this Section.  The break in service caused by the layoff shall be bridged upon restoration such that, although no service time is earned during the break, consecutive service is restored for eligibility for this benefit.
2. County Contribution
   1. Initial County Contribution
      1. On the first pay date following completion of the eligibility requirements, regular full-time employees shall receive a lump sum contribution of $2,400 deposited into an HRA account established in their name. Thereafter, contributions will be made each pay period based on the actual hours worked during that pay period.
      2. The lump sum contribution amount for regular part-time employees shall be pro-rated based on their allocated position only (e.g., a regular employee in a 0.5 full-time equivalent allocated position will receive a lump sum contribution of $1,200 deposited into their HRA account).
   2. Regular County Contribution
      After the initial contribution (defined above) is made, the County shall contribute $0.58 per pay status hour (no more than eighty (80) hours biweekly), not including overtime, for each eligible employee. For a full time employee, this equates to approximately $100 per month or $1,200 per year, after the initial eligibility period is met.
   3. Access to Account Balance
      1. Participants may access the balance in their HRA account upon termination of employment and attainment of age 50 or upon retirement from the Sonoma County Retirement System, whichever is earlier.
      2. Participants may defer accessing the account balance to any time beyond the earliest date described in (a).
      3. Amounts that remain in the account balance are available to reimburse the participant for the same permitted medical expenses for the spouse and any other dependent covered under the retiree medical plan, however, federal regulations do not permit the inclusion of expenses for domestic partners.
   4. Survivors of Eligible Retirees With Account Balances
      1. Spouses and eligible dependent children or dependent adults that are disabled may continue to access account balances after the death of the retiree.
      2. Domestic partners are not permitted access to the account balances of the participant by virtue of restrictions in the federal regulations that govern these types of accounts.
   5. Forfeiture of Account Balance:
      1. If an active employee dies prior to retirement, the amount of account balance is available to participating spouses and dependents to reimburse them for medical expenses permitted under the relevant section of the Internal Revenue code.
      2. Account balances in part or in total for active participants or retirees without any eligible spouse or dependent or unused account balances after the death of the last eligible spouse or dependent will be forfeited and returned to all other active and retired participants in the form of a dividend allocated in direct proportion to the amount to be distributed divided by the total account balance for all participants applied to each individual account balance. These distributions will occur within 120 days after the annual certified audit of the plan is submitted to the administrator and the County.
         
         This benefit will be subject to regulation under Section 105(b) of the Internal Revenue Code and subject to revenue rulings for these types of plans as promulgated. 

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Upon the death of a retiree enrolled in a County offered retiree medical plan, the County will continue to pay the County’s contribution toward the medical plan premium costs in the same manner as if the retiree had survived.

An eligible surviving dependent will be allowed to continue their coverage under the same circumstances and with the same County contribution as if the retiree had survived.  To be eligible, a surviving dependent must meet each of the following criteria:

1. Have been an eligible dependent of a retiree who was eligible to receive a contribution toward a County offered retiree medical plan under Sections 10.2 prior to the death of the retiree, and
2. Either be enrolled or have waived coverage at the time of the retiree’s death.

Any additional surviving eligible dependent(s) enrolled under the retiree’s medical plan at the time of the retiree’s death, may continue participation in the County offered medical plan but remain responsible for all premium costs in excess of the County contribution.

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Upon the death of a retiree enrolled in the Defined Contribution retiree medical benefit plan (as defined in Section 10.3), eligible surviving dependents may continue participation in the County offered medical plan but remain responsible for all costs (including premiums).

To be eligible, a surviving dependent must either be enrolled or have a waiver on file with the County, at the time of the retiree’s death.

This benefit will be subject to regulation under Section 105(b) of the Internal Revenue Code and subject to revenue rulings for these types of plans as promulgated.

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1. An employee must be a contributing member (or a contribution is made on their behalf) of the Sonoma County Employees’ Retirement Association (SCERA).
2. Regular full-time employees and part-time employees in an allocated position of 0.5 full-time equivalent or greater are eligible to receive a County HRA contribution.

10.6.1 Additional HRA - Biweekly Contribution

Effective February 23, 2010 through August 6, 2012 (end of pay period closest to Board adoption), for each eligible employee in paid status, the County contributed ten dollars ($10) each pay period into each employee’s individual HRA account.

10.6.2 Additional HRA - Access to Account Balance, Survivors, and Forfeiture

Parameters for the HRA including access to the HRA account balance, survivors of eligible retirees with account balances, and forfeiture of account balance in the event an active employee dies prior to retirement are as described in the HRA Plan Document.

10.6.3 County HRA Contribution – Full Obligation

The County contributions to the employee’s County HRA account described in Section 10.3, combined with the County former contribution to the HRA account described in Sections 10.6.1 and 10.6.2, constitute the County’s entire obligation towards medical benefits upon termination and/or retirement and the parties agree that no other retiree medical benefits exist.

10.6.4 Additional HRA – Determination of Intent

In the event that any court, arbitrator, administrative agency, or other tribunal of competent jurisdiction determines that any of the contributions described in Section 10.6.1 are to be included in calculating the County’s contribution toward retiree medical insurance for any retiree(s), then the contributions described in Section 10.6.1 shall be held in abeyance and the parties shall meet and confer on the matter to preserve the intent of the parties in an attempt to reach an agreement to preserve the benefits negotiated in Section 10.6.1.

10.6.5 Maintenance of HRA Accounts

1. The County agrees to maintain existing HRA accounts described in Section 10.6 for bargaining unit members.  Nothing herein renders County liable to Union or any employee for changes to laws or rules pertaining to administration of these accounts.
2. The County agrees to continue to pay administrative fees assessed to accounts by the contracted provider for the accounts established under Section 10.6.

10.6.6 Waiver

In consideration for the supplemental HRA, Section 10.6, the Union on behalf of itself and its current members/survivors as of January 26, 2010, waives any cause of action based on County conduct regarding retiree medical benefits from April 1, 2007 through August 6, 2012 (end of pay period closest to Board adoption).  Unless compelled by operation of law, the Union further agrees it will not initiate, financially support, or participate in any grievances, claims, demands, or suits against the County resulting from or in connection with the matters described herein.

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